Compute the new balance on a credit card assuming that: • Beginning balance = $450
• Purchases during the month = $300
• Payments made within the grace period = $250
• Interest rate = 18%
A) $550
B) $503
C) $516
D) $1,000

Question

Quizplus · Accepted Answer

The new balance can be calculated by adding the purchases to the beginning balance, subtracting any payments made, and then adding interest on the remaining amount. However, if payments are made within the grace period, typically no interest is charged on those payments. The calculation is: New balance = Beginning balance + Purchases - Payments. Since interest is not mentioned to be applied on the remaining balance after payment within the grace period, it's simply: $450 + $300 - $250 = $500. However, since none of the options exactly match this calculation and considering a possible slight mistake in the explanation regarding interest application, the closest correct option provided is $503, which might account for a minimal interest charge not detailed in the question or a slight miscalculation.

Compute the New Balance on a Credit Card Assuming That